Investor and Room 77 Founder on the Travel Startup Dilemma

For some startups, Brad Gerstner said, “you will never have the financial scale to break through to the consumer” when competing against powerful companies."

Is technology and great product enough to win?

This is a perennial dilemma for travel startups, and a point that Brad Gerstner, serial angel investor,operator of a $75 million venture fund, and Room 77 founder, hammered home during an executive roundtable discussion yesterday at the PhoCusWright conference in Hollywood, Florida.

Gerstner, whose hotel metasearcher Room 77 debuted in 2011 and competes against the likes of Kayak, Trivago, Google Hotels and TripAdvisor, said it is harder than ever — meaning more expensive than ever — to acquire a customer these days, and “a lot of us under-estimated” the network effects that larger competitors can use to such advantage.